U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB
|X|   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
               ACT OF 1934 THE FISCAL YEAR ENDED MARCH 30, 2007.

                          Commission File Number 0-5278
                                 IEH CORPORATION
                 (Name of Small Business Issuer in Its Charter)

                NEW YORK                                 13-5549348
     (State or Other Jurisdiction of        (I.R.S. Employer Identification No.)
             Incorporation)


        140 58th Street, Suite 8E
           Brooklyn, NY 11220                          (718) 492-9673
(Address of Principal Executive Offices)         (Issuer's Telephone Number,
                                                     Including Area Code)


Securities registered under Section 12(b) of the Exchange Act: NONE

Securities registered under Section 12(g) of the Act: Common Stock, $.01 Par
Value Per Share

Check whether the Registrant (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") during the past 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes |X|  No |_|

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form and no disclosure will be contained, to
the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. |X|

Indicate by check mark whether the Registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes|_| No |X|

The Registrant's revenues for the fiscal year ended March 30, 2007 were
$6,255,606.

The number of shares of Common Stock of the Registrant issued and outstanding as
of June 25, 2007 was 2,303,468.

The aggregate market value of the Registrant's voting stock (consisting of
Common Stock, $1.00 par value held by non-affiliates, computed by reference to
the closing price ($2.35) at which stock was sold on June 22, 2007, the last
trading day on which stock was reported to be sold, was $3,183,742.40.

DOCUMENTS INCORPORATED BY REFERENCE: None
Transitional Small Business Disclosure Format: Yes|_| No |X|

                                      -1-
<page>

                                 IEH CORPORATION

                                     PART I

Item I.  Business

         IEH Corporation (hereinafter referred to as the "Company") was
         organized under the laws of the State of New York on March 22, 1943
         under the name Industrial Heat Treating Company, Inc. On March 15,
         1989, the Company changed its name to its current name. The Company's
         executive offices and manufacturing facilities are located at 140 58th
         Street, Suite 8E, Brooklyn, New York 11220. The Company's telephone
         number is (718) 492-4448; Fax: 718-492-9898; its email address is
         ieh@iehcorp.com.

         The Company has been approved by the federal government as a "Hub-zone
         small business Company". This classification is monitored, and while
         the Company must remain competitive, it is taken into account by large
         business concerns when awarding specific contracts.

         The majority of the Company's customers require that the Company
         maintain quality system in strict accordance with ISO9001. This is an
         International Standard Organization specification for which the Company
         has recently been audited and has received certification to ISO:2000.
         The Company's quality policy is: "Listening to our Customers and
         meeting their needs, while continuously improving our processes and
         services."

         The Company has developed a web site that reflects the standard catalog
         items we produce. The web site is an ongoing project and we will
         continue to add special items and newsworthy information to it. The
         Company's web site can be viewed by going to: http://www.iehcorp.com.
                                                       ----------------------

         The Company designs, develops and manufactures printed circuit
         connectors for high performance applications. Our customers consist of
         OEM's (Original Equipment Manufacturers), and Distributors who sell our
         products to OEMs. We sell our products directly and through regional
         representatives located in the United States and Canada.

         The customers we service are in the government, aerospace, medical,
         automotive, test equipment and commercial electronics markets. We
         appear on the Military Qualified Product Listing "QPL" to MIL-C-55302
         and supply customer requested modifications to this specification.
         Sales to the commercial electronic market and military defense market
         were 27% and 72% of the Company's net sales for the year ended March
         30, 2007.

         In order to remain competitive, the Company has an internal program to
         upgrade and maintain machinery (to increase production), review
         material costs and increase labor force productivity.

         New Product Development

         The Company is sought after by many of its customers to design and
         manufacture custom connectors for them. This environment has resulted
         in the development of many new products and technologies.

         The Company has developed a new technology for a high speed connector
         module for one of its customers. Because it has been so well received,
         it will be used in 5 (five) other programs for which the customer has
         contracts.

                                      -2-
<page>

                                 IEH CORPORATION

                                     PART I

Item I.  Business (continued)

         New Product Development (continued)

         In addition to the many standard products we manufacture, it is in the
         area of custom connector design and manufacture that the Company faces
         its biggest challenge. To meet this challenge, we are able to draw upon
         our dedicated staff of engineers. We work with many designs and will
         continue to support our customers in all their requirements.

         Commitments

         The Company has a collective bargaining multi-employer pension plan
         ("Multi-Employer Plan") with the United Auto Workers of America, Local
         259. Contributions are made in accordance with a negotiated labor
         contract and are based on the number of covered employees employed per
         month. With the passage of the Multi-Employer Pension Plan Amendments
         Act of 1990 (the "Act"), the Company may become subject to liabilities
         in excess of contributions made under the collective bargaining
         agreement. Generally, these liabilities are contingent upon the
         termination, withdrawal, or partial withdrawal from the Multi-Employer
         Plan. The Company has not taken any action to terminate, withdraw or
         partially withdraw from the Multi-Employer Plan nor does it intend to
         do so in the future. Under the Act, liabilities would be based upon the
         Company's proportional share of such Plan's unfunded vested benefits,
         which is currently not available. The amount of accumulated benefits
         and net assets of such Plan also is not currently available to the
         Company. The total contributions charged to operations under such Plan
         were $69,122 for the year ended March 30, 2007 and $62,771 for the year
         ended March 31, 2006.

         On June 30, 1995, the Company applied to the Pension Benefit Guaranty
         Corporation ("PBGC") to have the PBGC assume all of the Company's
         responsibilities and liabilities under its Salaried Pension Plan. On
         April 26, 1996, the PBGC determined that the Salaried Pension Plan did
         not have sufficient assets available to pay benefits, which were and
         are currently due under the terms of the Plan.

         The PBGC further determined that pursuant to the provisions of the
         Employment Retirement Income Security Act of 1974, as amended ("ERISA")
         that the Salaried Pension Plan must be terminated in order to protect
         the interests of such Plan's participants. Accordingly, the PBGC
         proceeded pursuant to ERISA to have the Plan terminated and the PBGC
         appointed as statutory trustee, and to have July 31, 1995 established
         as the Plan's termination date.

         The Company and the PBGC have agreed to the terms of a settlement of
         the matter. The agreement is effective July 2, 2001. Under the
         agreement, the Company and the PBGC agreed on a total sum of $244,000.
         The Company has agreed to make payments as follows:

            September 1, 2003 to August 1, 2004     $2,000 per month
            September 1, 2004 to August 1, 2006     $3,000 per month
            September 1, 2006 to August 1, 2007     $4,000 per month

         Additionally, the Company has made balloon payments of $25,000 each on
         January 1, 2004, May 1, 2004, May 1, 2005 and January 1, 2006. The
         Company also granted the PBGC a lien on the Company's machinery and
         equipment.

                                      -3-
<page>

                                 IEH CORPORATION

                                     PART I

Item I.  Business (continued)

         Commitments (continued)

         As a result of this agreement the amount due the PBGC was restated to
         $244,000. $43,000 was paid during the year ended March 30, 2007,
         $86,000 was paid during the year ended March 31, 2006, $56,000 was paid
         during the year ended March 25, 2005 and $39,000 was paid during the
         year ended March 26, 2004. The remaining balance of $20,000 is reported
         as a current liability in the accompanying financial statements.

         Marketing and Sales

         The market for connectors and interconnection devices, domestic and
         worldwide, is highly fragmented as a result of the manufacture by many
         companies of a multitude of different types and varieties of
         connectors. For example, connectors include: printed circuit,
         rectangular I/O, circular, planar (IOC) RF coax, IC socket and fiber
         optic. The Company has been servicing a niche in the market by
         manufacturing HYPERTAC (TM) connectors and innovative Company-designed
         printed circuit connectors such as the COMTAC connectors. Previously,
         the Company was one of only three licensed manufacturers of the
         HYPERTAC (TM) design in the United States. In the fiscal year 1996, the
         Company learned that the other two licensees had merged. Moreover, the
         Company, based upon advice of counsel, determined that the HYPERTAC
         technology was no longer protected by a patent, and therefore was in
         the public domain. As a result, the Company notified the licensor that
         it would no longer be bound by the terms of its license agreement and
         the Company ceased making license payments. The Company has received a
         brief notice from the licensor that it disputed the Company's
         interpretations and demanded return of certain equipment. No legal
         proceedings have been instituted by the licensor and the Company has
         not received any further notices. The Company does not anticipate
         manufacturing other types of connectors in the immediate future. The
         Company is continuously experimenting with innovative connection
         designs, which may cause it to alter its marketing plans in the future
         if a market should develop for any of its current or future innovative
         designs.

         The Company's products are marketed to original equipment manufacturers
         directly and through distributors serving primarily the government,
         military, aerospace and commercial electronics markets. The Company is
         also involved in developing new connectors for specific uses, which
         result from changes in technology. This includes the COMTAC connectors.
         The Company assists customers in the development and design of
         connectors for specific customer applications. This service is marketed
         to customers who require the development of connectors and
         interconnection devices specially designed to accommodate the customers
         own products.

         The Company is primarily a manufacturer and its products are
         essentially basic components of larger assemblies of finished goods.
         Approximately 91% of the Company's net sales for the years ended March
         30, 2007 and March 31, 2006, respectively, were made directly to
         manufacturers of finished products with the balance of the Company's
         products sold to distributors. Distributors often purchase connectors
         for customers who do not require large quantities of connectors over a
         short period of time but rather require small allotments of connectors
         over an extended period of time.

         Two of the Company's customers accounted for 23% of the Company's net
         sales for the year ended March 30, 2007. For the year ended March 31,
         2006, one of those customers accounted for

                                      -4-
<page>

                                 IEH CORPORATION

                                     PART I


Item I.  Business (continued)

         approximately 19% of the Company's sales. The Company currently employs
         14 independent sales representatives to market its products in all
         regions in the United States.

         Backlog of Orders/Capital Requirements

         These independent sales representatives also promote the product lines
         of other electronics manufacturers; however, they do not promote the
         product lines of competitors, which compete directly with the Company's
         products. These sales representatives accounted for approximately 94%
         of Company sales (with the balance of Company sales being generated via
         direct customer contact) for the year ended March 30, 2007.

         International sales accounted for less than 1% of sales for the years
         ended March 30, 2007 and March 31, 2006, respectively.

         The backlog of orders for the Company's products amounted to
         approximately $2,864,000 at March 30, 2007, as compared to $1,830,000
         at March 31, 2006. A portion of these orders are subject to
         cancellation or postponement of delivery dates and, therefore, no
         assurance can be given that actual sales will result from these orders.
         The Company does not foresee any problems, which would prevent it from
         fulfilling its orders.

         Competition

         The design, development, manufacture and distribution of electrical
         connectors and interconnection devices is a highly competitive field.
         The Company principally competes with companies who produce high
         performance connectors in printed circuits and wireboards for high
         technology application. The Company competes with respect to their
         abilities to adapt certain technologies to meet specific product
         applications; in producing connectors cost-effectively; and in
         production capabilities. In addition, there are many companies who
         offer connectors with designs similar to those utilized by the Company
         and are direct competitors of the Company.

         The primary basis upon which the Company competes is product
         performance and production capabilities. The Company usually receives
         job orders after submitting bids pursuant to customer-issued
         specifications. The Company also offers engineering services to its
         customers in designing and developing connectors for specialized
         products and specific customer applications. This enables the Company
         to receive a competitive advantage over those companies who basically
         manufacture connectors based solely or primarily on cataloged
         specifications. Many of the Company's competitors have greater
         financial resources, market penetration and experience than the Company
         and no assurances can be given that the Company will be able to compete
         effectively with these companies in the future.

         Suppliers of Raw Materials and Component Parts

         The Company utilizes a variety of raw materials and manufactured
         component parts, which it purchases from various suppliers. These
         materials and components are available from numerous sources and the

                                      -5-
<page>

                                 IEH CORPORATION

                                     PART I


Item I.  Business (continued)

         Suppliers of Raw Materials and Component Parts (continued)

         Company does not believe that it will have a problem obtaining such
         materials in the future. However, any delay in the Company's ability to
         obtain necessary raw materials and component parts may affect its
         ability to meet customer production needs. In anticipation of such
         delays, the Company carries an inventory of raw materials and component
         parts to avoid shortages and to insure continued production.

         Research & Development

         The Company provides personalized engineering services to its customers
         by designing connectors for specific customer applications. The
         employment of electromechanical engineers is the anticipated
         cornerstone of the Company's future growth. The Company maintains a
         testing laboratory where its engineers experiment with new connector
         designs based on changes in technology and in an attempt to create
         innovative, more efficient connector designs.

         The Company expended $10,000 and $21,000 for the years ended March 30,
         2007 and March 31, 2006, respectively, on Company sponsored research
         and development activities relating to the development of new designs,
         techniques and the improvement of existing designs. In addition, the
         Company received $10,000 in revenues for the year ended March 30, 2007
         and $21,000 for the year ended March 31, 2006, respectively, pursuant
         to customer sponsored research activities.

         Employees

         The Company presently employs approximately 80 people, two (2) of whom
         are executive officers; four (4) are engaged in management activities;
         five (5) provide general and administrative services and approximately
         69 are employed in manufacturing and testing activities. The employees
         engaged in manufacturing and testing activities are covered by a
         collective bargaining agreement with the United Auto Workers of
         America, Local 259 (the "Union"), which originally expired on March 31,
         2006 and was renegotiated and extended until March 31, 2009. The
         Company believes that it has a good relationship with its employees and
         the Union.

         Patents and Licenses

         Electrical connectors and interconnection devices are usually the
         subject of standard designs; therefore, only innovations of standards
         designs or the discovery of a new form of connector are patentable. The
         Company is continuously attempting to develop new forms of connectors
         or adaptations of current connector designs in an attempt to increase
         performance and decrease per unit costs. The Company has developed and
         designed the COMTAC connector, which was patented on January 19, 1988,
         at which time the patent was assigned to the Company.

         Governmental Regulations

         The Company is subject to federal regulations under the Occupational
         Safety and Health Act ("OSHA") and the Defense Electrical Supply
         Command ("DESC"). OSHA provides federal guidelines and

                                      -6-
<page>

                                 IEH CORPORATION

                                     PART I


Item I.  Business (continued)

         Governmental Regulations (continued)

         specifications to companies in order to insure the health and safety of
         employees. DESC oversees the quality and specifications of products and
         components manufactured and sold to the government and the defense
         industry. Although DESC continuously requires suppliers to meet
         changing specifications, the Company has not encountered any
         significant problems meeting such specifications and its products have,
         in the past, been approved. The Company is unaware of any changes in
         the government's regulations, which are expected to materially affect
         the Company's business.

Item 2.  Properties

         The Company exercised its option to renew its lease on its facility for
         10 years. The original lease was effective through August 23, 2001.

         The Company is obligated under this renewal lease through August 23,
         2011, at minimum annual rentals as follows:

         Fiscal year ending March:

         2008                           $168,384
         2009                            168,384
         2010                            168,384
         2011                            112,256
                                        --------

                                        $617,408
                                        ========

         The Company leases approximately 20,400 feet of space, of which it
         estimates, 6,000 square feet are used as executive, sales and
         administrative offices and 14,400 square feet are used for its
         manufacturing and plating.

         The rental expense for the year ended March 30, 2007 and March 30, 2006
         was $142,369 and $136,325, respectively. In addition to the base rent,
         the Company pays real estate taxes, insurance premiums and utility
         charges relating to the use of the premises. The Company considers its
         present facilities to be adequate for its present and anticipated
         future needs.

Item 3.  Legal Proceedings

         The Company is not a party to or aware of any pending or threatened
         legal proceedings which would result in any material adverse effect on
         its operations or its financial condition.

                                      -7-
<page>

                                 IEH CORPORATION

                                     PART II

Item 4.  Submission of Matters to Vote of Security Holders

         No matters were submitted to shareholders during the fourth quarter for
         the fiscal year ended March 30, 2007.

Item 5.  Market for Common Equity and Related Stockholder Matters

         Principal Market

         The common stock of the Company (the "common stock") is traded in the
         Over-The-Counter Market and is quoted on the National Association of
         Securities Dealers Automated Quotation ("NASDAQ") System Bulletin Board
         under the symbol "IEHC.OB". On January 11, 1993, the Company's common
         stock was deleted from listing on the NASDAQ SmallCap Market System
         because of the Company's failure to maintain the minimum asset and
         shareholders equity requirements. On January 12, 1993, the Company's
         common stock was first quoted over the Electronic Bulletin Board
         (OTCBB).

         Market Information

         The range of high and low bid prices for the Company's common stock,
         for the periods indicated as set forth below. For the period to October
         29, 1991, the Company was listed on the NASDAQ National Market System.
         On October 29, 1991, the Company's common stock was delisted from the
         NASDAQ National Market System and from October 29, 1991 to January 11,
         1993, the Company's common stock was listed on the NASDAQ SmallCap
         Market System. On January 11, 1993, the Company's common stock was
         delisted from the NASDAQ SmallCap Market System and on January 13,
         1993, the Company's common stock was first quoted over the Electronic
         Bulletin Board (OTCBB). Set forth below is a table indicating the high
         and low bid prices of the common stock during the periods indicated.

                         Year                             High Bid       Low Bid

         Fiscal Year ended March 30, 2007

         1st Quarter                                          2.75          1.90
         2nd Quarter                                          4.45          2.00
         3rd Quarter                                          2.45          1.73
         4th Quarter                                          1.95          1.80

         Fiscal Year ended March 31, 2006  (1)

         1st Quarter                                           .90           .34
         2nd Quarter                                          3.13           .58
         3rd Quarter                                          4.75          1.55
         4th Quarter                                          2.70          2.00


         (1) As reported by the OTCBB.

                                      -8-
<page>


                                 IEH CORPORATION

                                     PART II

Item 5.  Market for Common Equity and Related Stockholder Matters (continued)

         The above quotations, as reported, represent prices between dealers and
         do not include retail mark-ups, mark-downs or commissions. Such
         quotations do not necessarily represent actual transactions. On June
         21, 2007 the high bid for the common stock was $2.35 and the low bid
         was $2.35. Trading in our securities does not occur on a daily basis.

         Dividends

         The Company has not paid any cash dividends on its common stock during
         the last five (5) fiscal years. At present, the Company does not
         anticipate issuing any cash dividends on its common stock in the
         foreseeable future by reason of its contemplated future financial
         requirements and business plans. The Company will retain earnings, to
         the extent that there are any, to finance the development of its
         business.

         Approximate Number of Equity Security Holders

         The number of record holders of the Company's common stock as of June
         22, 2007 was approximately 570. Such number of record owners was
         determined from the Company's stockholder records, and does not include
         the beneficial owners of the Company's common stock whose shares are
         held in the names of various security holders, dealers and clearing
         agencies.

Item 6.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations

         Statements contained in this report, which are not historical facts may
         be considered forward looking information with respect to plans,
         projections, or future performance of the Company as defined under the
         Private Securities Litigation Reform Act of 1995. These forward-looking
         statements are subject to risks and uncertainties, which could cause
         actual results to differ materially form those projected. The words
         "anticipate," "believe", "estimate", "expect," "objective," and "think"
         or similar expressions used herein are intended to identify
         forward-looking statements. The forward-looking statements are based on
         the Company's current views and assumptions and involve risks and
         uncertainties that include, among other things, the effects of the
         Company's business, actions of competitors, changes in laws and
         regulations, including accounting standards, employee relations,
         customer demand, prices of purchased raw material and parts, domestic
         economic conditions, including housing starts and changes in consumer
         disposable income, and foreign economic conditions, including currency
         rate fluctuations. Some or all of the facts are beyond the Company's
         control.

         The following discussion and analysis should be read in conjunction
         with the financial statements and related footnotes, which provide
         additional information concerning the Company's financial activities
         and condition.

         Critical Accounting Policies

         The Financial Statements have been prepared in accordance with
         accounting principles generally accepted in the United States of
         America, which require the Company to make estimates and assumptions
         that affect the reported amounts of assets and liabilities at the date
         of the Financial Statements, and revenues and expenses during the
         periods reported. Actual results could differ from those estimates. The
         Company believes the following are the critical accounting policies,
         which could have the most significant effect on the Company's reported
         results and require the most difficult, subjective or complex judgments
         by management.

                                      -9-
<page>

                                 IEH CORPORATION

                                     PART II

Item 6.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations (continued)

         Critical Accounting Policies (continued)

         o    Impairment of Long-Lived Assets:
              The Company reviews its long-lived assets for impairment whenever
              events or circumstances indicate that the carrying amount of an
              asset may not be recoverable. If the sum of the expected cash
              flows, undiscounted and without interest, is less than the
              carrying amount of the asset, an impairment loss is recognized as
              the amount by which the carrying amount of the asset exceeds its
              fair value. The Company makes estimates of its future cash flows
              related to assets subject to impairment review.

         o    Inventory Valuation:
              Raw materials and supplies are valued at the lower of first-in,
              first-out cost or market. Finished goods and work in process are
              valued at the lower of actual cost, determined on a specific
              identification basis, or market. The Company estimates which
              materials may be obsolete and which products in work in process or
              finished goods may be sold at less than cost, and adjusts their
              inventory value accordingly. Future periods could include either
              income or expense items if estimates change and for differences
              between the estimated and actual amount realized from the sale of
              inventory.

         o    Income Taxes:
              The Company records a liability for potential tax assessments
              based on its estimate of the potential exposure. Due to the
              subjectivity and complex nature of the underlying issues, actual
              payments or assessments may differ from estimates. Income tax
              expense in future periods could be adjusted for the difference
              between actual payments and the Company's recorded liability based
              on its assessments and estimates.

         o    Revenue Recognition:
              Revenues are recognized at the shipping date of the Company's
              products. The Company has historically adopted the shipping terms
              that title merchandise passes to the customer at the shipping
              point (FOB Shipping Point). At this juncture, title has passed,
              the Company has recognized the sale, inventory has been relieved,
              and the customer has been invoiced. The Company does not offer any
              discounts, credits or other sales incentives.

              The Company's policy with respect to customer returns and
              allowances as well as product warranty is as follows:

              The Company will accept a return of defective product within one
              year from shipment for repair or replacement at the Company's
              option. If the product is repairable, the Company at its own cost
              will repair and return it to the customer. If unrepairable, the
              Company will either offer an allowance against payment or will
              reimburse the customer for the total cost of the product.

                                      -10-
<page>

                                 IEH CORPORATION

                                     PART II

Item 6.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations (continued)

              Most of the Company's products are custom ordered by customers for
              a specific use. The Company provides engineering services as part
              of the relationship with its customers in developing the custom
              product. The Company is not obligated to provide such engineering
              service to its customers. The Company does not charge separately
              for these services.

         o    Research & Development:
              The Company provides personalized engineering services to its
              customers by designing connectors for specific customer
              applications. The employment of electromechanical engineers is the
              anticipated cornerstone of the Company's future growth. The
              Company maintains a testing laboratory where its engineers
              experiment with new connector designs based on changes in
              technology and in an attempt to create innovative, more efficient
              connector designs.

              The Company expended $10,000 and $21,000 for the years ended March
              30, 2007 and March 31, 2006, respectively, on Company sponsored
              research and development activities relating to the development of
              new designs, techniques and the improvement of existing designs.
              In addition, the Company received $10,000 in revenues for the year
              ended March 30, 2007 and $21,000 for the year ended March 31, 2006
              pursuant to customer sponsored research activities.

         Results of Operations

         The following table sets forth for the periods indicated, percentages
         for certain items reflected in the financial data as such items bear to
         the revenues of the Company:

                         Relationship to Total Revenues
                                                          March 30,   March 31,
                                                             2007       2006
                                                          ---------   ---------

         Operating Revenues (in thousands)                $   6,256   $   7,588
                                                          ---------   ---------

         Operating Expenses:
           (as a percentage of Operating Revenues)

                     Costs of Products Sold                    73.8%       64.0%
                     Selling, General and Administrative       18.2%       16.5%
                     Interest Expense                           1.2%        1.2%
                     Depreciation and amortization              3.0%        2.7%
                                                          ---------   ---------

                            TOTAL COSTS AND EXPENSES           96.2%       84.4%
                                                          ---------   ---------

         Operating Income (loss)                                3.8%       15.6%

         Other Income                                            --          --
                                                          ---------   ---------

         Income (loss) before Income Taxes                      3.8%       15.6%

         Income Taxes                                            .6%         .6%
                                                          ---------   ---------
         Net Income (loss)                                      3.2%       15.0%
                                                          =========   =========

                                      -11-
<page>

                                 IEH CORPORATION

                                     PART II


Item 6.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations (continued)

         Results of Operations (continued)

         Year End Results: March 30, 2007 vs. March 31, 2006

         Operating revenues for the year ended March 30, 2007 amounted to
         $6,255,606 reflecting a 17.6% decrease versus the year ended March 31,
         2006 revenues of $7,588,253. The decrease in revenues is a direct
         result of a decrease in defense and commercial sales.

         The Company is primarily a manufacturer and its products are
         essentially basic components of larger assemblies of finished goods.
         Approximately 91% of the Company's net sales for the fiscal years ended
         March 30, 2007 and March 31, 2006, respectively, were made directly to
         manufacturers of finished products with the balance of the Company's
         products sold to distributors. Distributors often purchase connectors
         for customers who do not require large quantities of connectors over a
         short period of time but rather require small allotments of connectors
         over an extended period of time.

         For the fiscal year ended March 30, 2007, two of the Company's
         customers accounted for approximately 23% of total sales. One of those
         customers accounted for approximately 19% of sales in the fiscal year
         ended March 31, 2006.

         The Company currently employs 14 independent sales representatives to
         market its products in all regions of the United States. These sales
         representatives accounted for approximately 94% of the Company's sales,
         with the balance of sales being generated by direct customer contact.

         For the fiscal year ended March 30, 2007, the Company's principal
         customers included manufacturers of commercial electronic products,
         military defense contractors and distributors who service these
         markets. Sales to the commercial electronic and government markets
         comprised 27% and 72% of the Company's net sales for the year ended
         March 30, 2007 and 26% and 73% for the year ended March 31, 2006.
         Approximately 1% of net sales were made to international customers in
         each fiscal year.

         Cost of products sold amounted to $4,619,126 for the fiscal year ended
         March 30, 2007, or 73.8% of operating revenues. This reflected a
         $237,155 or 4.9% decrease in the cost of products sold from $4,856,281
         or 64% of operating revenues for the fiscal year ended March 31, 2006.
         This decrease is due primarily to the decreased cost of production
         associated with the decrease in defense and commercial sales.

         Selling, general and administrative expenses were $1,138,668 and
         $1,253,458 or 18.2% and 16.5% of operating revenues for the fiscal
         years ended March 30, 2007 and March 31, 2006, respectively. This
         category of expense decreased by $114,790 or 9.2% from the prior year.
         The decrease can be attributed to a decrease in commissions and travel.

         Interest expense was $73,506 for the fiscal year ended March 30, 2007
         or 1.2% of operating revenues. For the fiscal year ended March 31,
         2006, interest expense was $90,616 or 1.2% of operating revenues. The
         decrease of $17,110 or 18.9% reflects the liquidation of a significant
         amount of the Company's debt.

                                      -12-
<page>

                                 IEH CORPORATION

                                     PART II


Item 6.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations (continued)

         Results of Operations (continued)

         Year End Results: March 30, 2007 vs. March 31, 2006

         Depreciation and amortization of $184,757 or 3.0% of operating revenues
         was reported for the fiscal year ended March 30, 2007. This reflects a
         decrease of $19,496 or 9.5% from the prior year ended March 31, 2006 of
         $204,253 or 2.7% of operating revenues. The decrease is due primarily
         to a decrease in capital assets being purchased over the current fiscal
         year.

         The Company reported net income of $200,693 for the year ended March
         30, 2007 representing basic earnings of $.09 per share as compared to
         net income of $1,137,622 or $.49 per share for the year ended March 31,
         2006. The decrease in net income for the current year can be attributed
         primarily to the reported decrease in defense and commercial sales.

         Liquidity and Capital Resources

         The Company reported working capital of $1,267,189 as of March 30, 2007
         compared to a working capital of $1,083,444 as of March 31, 2006. The
         increase in working capital of $183,745 was attributable to the
         following items:

                   Net income                      $ 200,693
                   Depreciation and amortization     184,757
                   Capital expenditures             (176,869)
                   Other transactions                (24,836)
                                                   ---------
                                                   $ 183,745
                                                   =========

         As a result of the above, the current ratio (current assets to current
         liabilities) was 1.95 to 1 at March 30, 2007 as compared to 1.8 to 1.0
         at March 31, 2006. Current liabilities at March 30, 2007 were
         $1,334,302 compared to $1,392,060 at March 31, 2006.

         The Company reported $176,869 in capital expenditures for the year
         ended March 30, 2007 and reported depreciation of $184,757 for the year
         ended March 30, 2007.

         The net income of $200,693 for the year ended March 30, 2007 resulted
         in an increase in stockholders' equity to $2,484,020 as compared to
         stockholders' equity of $2,283,327 at March 31, 2006.

         The Company has an accounts receivable financing agreement with a
         factor, which bears interest at 2.5% above prime with a minimum of 12%
         per annum. At March 30, 2007 the amount outstanding with the factor was
         $477,387 as compared to $269,099 at March 31, 2006. The loan is secured
         by the Company's accounts receivables and inventories. The factor
         provides discounted funds based upon the

                                      -13-
<page>

                                 IEH CORPORATION

                                     PART II


Item 6.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations (continued)

         Liquidity and Capital Resources (continued)

         Company's accounts receivables, these funds provide the primary source
         of working capital for operations.

         In the past two fiscal years, management has been reviewing its
         collection practices and policies for outstanding receivables and has
         revised its collection procedures to a more aggressive collection
         policy. As a consequence of this new policy the Company's experience is
         that its customers have been remitting payments on a more consistent
         and timely basis. The Company reviews the collectablity of all accounts
         receivable on a monthly basis. The reserve is less than 2% of average
         gross accounts receivable and is considered to be conservatively
         adequate.

         During the year ended March 26, 2004, two of the Company's officers
         loaned the Company a total of $52,000 on a non-interest bearing basis.
         The Company used these funds as a source of additional working capital.

         During the year ended March 25, 2005, one of these officers loaned the
         Company an additional $135,744 on a non-interest bearing basis as well.
         These funds were also used by the Company for working capital
         requirements. Through the period ended March 31, 2006, the Company had
         repaid $108,744 of the total funds loaned to it.

         During the year ended March 30, 2007 one of the officers loaned the
         company an additional $88,000 on a non-interest bearing basis. During
         the same period the company had repaid $76,000 of the loans made to it.
         The balance due to one of these officers at March 30, 2007 was $91,000.

         The Company has a collective bargaining Multi-Employer Plan with the
         United Auto Workers of America, Local 259. Contributions are made in
         accordance with a negotiated labor contract and are based on the number
         of covered employees employed per month. With the passage of the Act,
         the Company may become subject to liabilities in excess of
         contributions made under the collective bargaining agreement.
         Generally, these liabilities are contingent upon the termination,
         withdrawal, or partial withdrawal from the Multi-Employer Plan. The
         Company has not taken any action to terminate, withdraw or partially
         withdraw from the Multi-Employer Plan nor does it intend to do so in
         the future. Under the Act, liabilities would be based upon the
         Company's proportional share of such Plan's unfunded vested benefits,
         which is currently not available. The amount of accumulated benefits
         and net assets of such Plan also is not currently available to the
         Company. The total contributions charged to operations under the
         Multi-Employer Plan were $69,122 for the year ended March 30, 2007 and
         $62,771 for the year ended March 31, 2006.

         On June 30, 1995, the Company applied to the PBGC to have the PBGC
         assume all of the Company's responsibilities and liabilities under its
         Salaried Pension Plan. On April 26, 1996, the PBGC determined that the
         Salaried Pension Plan did not have sufficient assets available to pay
         benefits, which were and are currently due under the terms of the
         Salaried Pension Plan.

                                      -14-
<page>

                                 IEH CORPORATION
                                     PART II


Item 6.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations (continued)

         Liquidity and Capital Resources (continued)

         The PBGC further determined that pursuant to the provisions of the
         ERISA that the Salaried Pension Plan must be terminated in order to
         protect the interests of the Plan's participants. Accordingly, the PBGC
         proceeded pursuant to ERISA to have the Salaried Pension Plan
         terminated and the PBGC appointed as statutory trustee, and to have
         July 31, 1995 established as the Plan's termination date.

         The Company and the PBGC agreed to the terms of a settlement of the
         matter. The agreement is effective July 2, 2001. Under the agreement,
         the Company and the PBGC agreed on a total sum of $244,000. The Company
         has agreed to make payments as follows:

         September 1, 2003 to August 1, 2004            $2,000 per month
         September 1, 2004 to August 1, 2006            $3,000 per month
         September 1, 2006 to August 1, 2007            $4,000 per month

         Additionally, the Company has made balloon payments of $25,000 each on
         January 1, 2004, May 1, 2004, May 1, 2005 and January 1, 2006.

         The Company also granted the PBGC a lien on the Company's machinery and
         equipment.

         As a result of this agreement the amount due the PBGC was restated to
         $244,000. $43,000 was paid during the year ended March 30, 2007,
         $86,000 was paid during the year ended March 31, 2006, $56,000 was paid
         during the year ended March 25, 2005 and $39,000 was paid during the
         year ended March 26, 2004. The remaining balance of $20,000 is reported
         as a current liability on the accompanying financial statements.

         On September 21, 2001 the Company's shareholders approved the adoption
         of the Company's 2002 Employees Stock Option Plan to provide for the
         grant of options to purchase up to 750,000 shares of the Company's
         common stock to all employees, including senior management. No options
         have been granted under the Employee Option Plan to date.

         Options granted to employees under this plan may be designated as
         options which qualify for incentive stock option treatment under
         Section 422A of the Internal Revenue Code, or option which do not so
         qualify. Under this plan, the exercise price of an option designated as
         an Incentive Stock Option shall not be less than the fair market value
         of the Company's common stock on the day the option is granted.

         In the event an option designated as an incentive stock option is
         granted to a ten percent (10%) share holder, such exercise price shall
         be at least 110 Percent (110%) of the fair market value or the
         Company's common stock and the option must not be exercisable after the
         expiration of five years from the day of the grant. Exercise prices of
         non-incentive stock options may be less than the fair market value of
         the Company's common stock. The aggregate fair market value of shares
         subject to options granted to its participants, which are designated as
         incentive stock options, and which become exercisable in any calendar
         year, shall not exceed $100,000. As of March 30, 2007 no options had
         been granted under the plan.

         In 1987, the Company adopted a cash bonus plan ("Cash Bonus Plan") for
         Executive Officers. Contributions to the Cash Bonus Plan are made by
         the Company only after pre-tax operating profits

                                      -15-
<page>

                                 IEH CORPORATION
                                     PART II


Item 6.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations (continued)

         exceed $150,000 for a fiscal year, and then to the extent of 10% of the
         excess of the greater of $150,000 or 25% of pre-tax operating profits.
         For the year ended March 30, 2007 the contribution was $20,000. For the
         year ended March 31, 2006 the contribution was $75,500.

         Effects of Inflation

         The Company does not view the effects of inflation to have a material
         effect upon its business. Increases in costs of raw materials and labor
         costs have been offset by increases in the price of the Company's
         products, as well as reductions in costs of production, reflecting
         management's efforts in this area. While the Company has in the past
         increased its prices to customers, it has maintained its relatively
         competitive price position. However, significant decreases in
         government and military subcontractor spending, has provided excess
         production capacity in the industry, which in turn has tightened
         pricing margins.

         Off Balance Sheet Arrangements

         The Company does not have any off balance sheet arrangements within the
         meaning of Item 303 of Regulation S-B.

Item 7.  Financial Statements

         See Index to Financial Statements attached hereto appearing at page 25
         and the Financial Statements attached hereto appearing at pages 27 to
         43.

Item 8.  Controls and Procedures

         Evaluation of Disclosure Controls and Procedures:

         Our management, under the supervision and with the participation of our
         Chief Executive Officer and Controller, conducted an evaluation of our
         "disclosure controls and procedures" (as defined in the Securities
         Exchange Act of 1934 Rules 13a-14(c)) within 90 days of the filing date
         of this Report on Form 10-KSB. Based on their evaluation, our Chief
         Executive Officer and Controller have concluded that as of the end of
         the period covered by this Form 10-KSB, our disclosure controls and
         procedures are effective to ensure that all material information
         required to be filed in this Report on Form 10-KSB has been made known
         to them. Our Chief Financial Officer and Controller is our principal
         accounting officer.

         There have been no changes, including corrective actions with regard to
         significant deficiencies or material weaknesses in our internal
         controls or in other factors that have materially affected or could
         significantly or materially affect these controls subsequent to the
         Evaluation Date set forth above. In addition, historically, the Company
         has relied upon the entire Board of Directors in appointing the
         Company's independent auditors and reviewing the financial condition
         and statements of the Company. Given the relatively small size of the
         Company's operations and revenues, the Board has not believed that
         appointing an independent committee was a necessity.

                                      -16-
<page>

                                 IEH CORPORATION

                                    PART III


Item 9.  Directors, Executive Officers, Promoters and Control Persons;
         Compliance with Section 16 (a) of the Exchange Act

         Additionally, in response to the passage of the Sarbanes-Oxley Act of
         2002, our Board of Directors and management have adopted a Code of
         Ethics and have instituted a periodic review by members of our
         management team to assist and guide the disclosure process. The Board
         has also determined to periodically review and develop policies and
         procedures to enhance our disclosure controls and procedures as well as
         with reviewing our periodic reports and other public disclosures.

         The executive officers and directors of the Company are as follows:

               Name              Age                      Office

         Michael Offerman        66       Chairman of the Board of Directors and
                                          President

         Robert Knoth            65       Secretary and Treasurer

         Murray Sennet           84       Director

         Allen Gottlieb          66       Director

         All directors serve for a term of two years and until their successors
         are duly elected. All officers serve at the discretion of the Board of
         Directors.

         Executive Officers and Directors

         Michael Offerman has been a member of the Board of Directors since
         1973. In May 1987, Mr. Offerman was elected President of the Company
         and has held that position since that date. Prior to his becoming
         President, Mr. Offerman served as Executive Vice-President of the
         Company.

         Robert Knoth joined the Company as Controller in January 1990 and was
         elected Treasurer of the Company in March 1990. Mr. Knoth was elected
         as Secretary of the Company in September 1992 and Mr. Knoth has held
         these positions since said dates. From 1986 to January 1990, Mr. Knoth
         was employed as controller by G&R Preuss, Inc., a company engaged in
         the business of manufacturing truck bodies and accessories.

         Murray Sennet has been a member of the Company's Board of Directors
         since 1970. Mr. Sennet was the Secretary and the Treasurer of the
         Company at the time of his retirement in April 1986.

         Allen Gottlieb has been a member of the Company's Board of Directors
         since 1992. Mr. Gottlieb has been an attorney in private practice for
         over five (5) years.

                                      -17-
<page>

                                 IEH CORPORATION

                                    PART III


Item 9.  Directors, Executive Officers, Promoters and Control Persons;
         Compliance with Section 16 (a) of the Exchange Act (continued)

         Significant Employees

         Joan Prideaux joined the Company in April 1994, as Director of Sales
         and Marketing. Joan has been in the connector business over 30 years
         and brings this experience to IEH. Prior to joining us, she was
         employed by Automatic Connector as Director of Sales.

         Mark Iskin is the Director of Purchasing, a position he has held since
         September 2000. Prior to joining the Company, Mr. Iskin worked as a
         materials and purchasing specialist, in manufacturing and distribution
         companies. In his last position with an industrial distributor, Mr.
         Iskin was responsible for purchasing and managing vendors for the
         cutting tool section of the catalog. In addition he participated in
         setting up and developing the company's forecasting/planning software
         related to that department procedures.

         David Offerman joined IEH in September 2004 as the National Sales
         Manager. Prior to joining IEH, David worked as an account executive and
         sales manager in the telecommunication industry.

         Robert Romeo serves as Vice President of Engineering for IEH, a
         position he has held since October 2005. Robert has corporate
         responsibility for engineering products and driving product
         enhancements to satisfy the demanding application requirements of IEH
         customers. In addition, Robert is tasked with engineering new product
         developments in the IEH connector offerings to broaden the market base
         of potential customers. These new connectors will introduce the
         traditional IEH quality and value to industries that specify
         exceptional reliability and performance in electrical and electronic
         equipment. Before joining IEH, Robert worked for more than 20 years in
         positions of increasing responsibility for major national manufacturers
         of electrical and electronic goods for residential, industrial,
         government and OEM markets.

         Paul Tzetzos joined IEH in November, 2005 as a Quality Assurance
         Director. Paul has over 20 years of experience in the field of Quality
         Assurance; with the last 15 years as Director/Manager. A degreed
         Engineer, with diversified knowledge in developing, implementing,
         maintaining, and improving Quality Systems, such as, ISO 9001:2000,
         EECS, MIL-Q-9858A, ETC and a certified Lead and Internal Auditor, Paul
         has a great deal of knowledge concerning military and industry
         specifications and standards.

         Certain Reports

         Section 16(a) of the Securities Exchange Act of 1934 requires the
         Company's directors and officers and persons who own, directly or
         indirectly, more than 10% of a registered class of the Corporation's
         equity securities, to file with the Securities and Exchange Commission
         ("SEC") reports of ownership and reports of changes in ownership of
         common stock of the Corporation.

         Officers, directors and greater than 10% shareholders are required to
         furnish the Company with copies of all Section 16(a) reports that they
         file. Based solely on review of the copies of such reports received

                                      -18-
<page>

                                 IEH CORPORATION

                                    PART III


Item 10. Executive Compensation

         by the Company, the Company believes that filing requirements
         applicable to officers, directors and 10% shareholders were complied
         with during the fiscal year.

         The following table sets forth below the summary compensation paid or
         accrued by the Company during the fiscal years ended March 30, 2007,
         March 31, 2006 and March 25, 2005 for the Company's Chief Executive
         Officer:

<table>
<caption>

                                                                            Other Annual
Name and Principal Position             Year          Salary       Bonus    Compensation
--------------------------------   --------------   -----------   -------   ------------

                                      <c>            <c>         <c>          <c>
Michael Offerman, Chief
Executive officer, President (1)   March 30, 2007   $   100,000   $ 5,000         0
                                   March 31, 2006       100,000    24,000         0
                                   March 25, 2005        96,235     1,424         0
</table>

         (1)      During the years ended March 30, 2007, March 31, 2006 and
                  March 25, 2005, the Company provided automobile allowances to
                  Mr. Offerman. This does not include the aggregate incremental
                  cost to the Company of such automobile allowance.

         (2)      There are no employment agreements between the Company and
                  members of its senior management, including the Chief
                  Executive Officer, Michael Offerman.

         No other officer of the Company received compensation (salary and
         bonus) in excess of $100,000 during the fiscal years ended March 30,
         2007, March 31, 2006 and March 25, 2005.

         Pension/Benefit Incentive Plan

         In 1964, the Company's Shareholders and Board of Directors adopted a
         contributory pension plan (the "Salaried Pension Plan") effective April
         1, 1964, for salaried employees of the Company. The Salaried Pension
         Plan as revised on April 1, 1987, provides for retirement benefits for
         qualified employees upon or prior to retirement.

         For early retirement, employees are eligible to receive a portion of
         their retirement benefits, starting 10 years prior to the employees
         anticipated normal retirement age (age 65), if the employee has
         completed 15 years of service to the Company. The employee is eligible
         to receive reduced retirement benefits based on an actuarial table for
         a period not exceeding ten (10) years of his lifetime. In no event
         would benefits exceed $12,000 per year.

         For normal retirement at the age of sixty-five (65) the employee is
         entitled to receive full retirement benefits for a period not exceeding
         ten (10) years of his lifetime. If the employee should die prior to the
         ten-year period, his beneficiaries will continue to receive the full
         benefit for the remainder of the ten-year term. In no event will
         benefits exceed $12,000 per year.

                                      -19-
<page>

                                 IEH CORPORATION

                                    PART III

Item 10. Executive Compensation (continued)

         Pension/Benefit Incentive Plan (continued)

         If payment is made on the "joint and survivor basis" as elected by the
         employee, benefits will be provided to both the employee and spouse on
         a reduced basis over the life of both the employee and his spouse. If
         the employee should die prior to the guaranteed ten year period, the
         spouse will receive the employee benefit for the remainder of the term,
         after which, the spouse will received the reduced spousal benefit for
         the life of the spouse. In no event will the benefits pursuant to the
         joint and survivor basis exceed $12,000 per year.

         On June 30, 1995, the Company applied to the PBGC to have the PBGC
         assume all of the Company's responsibilities and liabilities under its
         Salaried Pension Plan. On April 26, 1996, the PBGC determined that the
         Salaried Pension Plan did not have sufficient assets available to pay
         benefits, which were and are currently due under the terms of such
         Plan.

         The PBGC further determined that pursuant to the provisions of the
         ERISA, that the Plan must be terminated in order to protect the
         interests of the Plan's participants. Accordingly, the PBGC proceeded
         pursuant to ERISA to have the Plan terminated and the PBGC appointed as
         statutory trustee, and to have July 31, 1995 established as the Plan's
         termination date.

         The Company and the PBGC negotiated a settlement on the entire matter
         and on July 2, 2001, an agreement was reached whereby the Company's
         liability to the PBGC was reduced to $244,000. The Company will make
         monthly payments to the PBGC as follows:

         September 1, 2003 to August 1, 2004            $2,000 per month
         September 1, 2004 to August 1, 2006            $3,000 per month
         September 1, 2006 to August 1, 2007            $4,000 per month


         Additionally, the Company has made balloon payments of $25,000 each on
         January 1, 2004, May 1, 2004, May 1, 2005 and January 1, 2006.

         The Company also granted the PBGC a lien on the Company's machinery and
         equipment.

                                      -20-
<page>

                                 IEH CORPORATION

                                    PART III

Item 10. Executive Compensation (continued)

         Pension/Benefit Incentive Plan (continued)

         As a result of this agreement the amount due the PBGC was restated to
         $244,000. $43,000 was paid during the year ended March 30, 2007,
         $86,000 was paid during the year ended March 31, 2006, $56,000 was paid
         during the year ended March 25, 2005 and $39,000 was paid during the
         year ended March 26, 2004. The remaining balance of $20,000 is reported
         as a current liability on the accompanying financial statements.

         Cash Bonus Plan

         In 1987, the Company adopted a cash bonus plan ("Cash Bonus Plan") for
         Executive Officers. Contributions to the Cash Bonus Plan are made by
         the Company only after pre-tax operating profits exceed $150,000 for a
         fiscal year, and then to the extent of 10% of the excess of the greater
         of $150,000 of 25% of pre-tax operating profits. For the year ended
         March 30, 2007 the contribution was $20,000. The contribution for the
         year ended March 31, 2006 was $75,500.

Item 11. Security Ownership of Certain Beneficial Owners and Management

         The following table sets forth certain information as of June 22, 2007
         with respect to (i) the persons (including any "group" as that term is
         used in Section 13(d)(3) of the Securities Exchange Act of 1934), known
         by the Company to be the beneficial owner of more than five percent
         (5%) of any class of the Company's voting securities; (ii) each
         Executive Officer and Director who owns common stock in the Company;
         and (iii) all Executive Officers and Directors as a group. As of June
         22, 2007, there were 2,303,468 shares of common stock issued and
         outstanding.

                                      -21-
<page>

                                 IEH CORPORATION

                                    PART III

Item 11. Security Ownership of Certain Beneficial Owners and Management
         (continued)

--------------------------------------------------------------------------------
                                               Amount of
                                             and Nature of
                   Name and Address of         Beneficial    Percentage of Class
Title of Class     Beneficial Owner            Ownership
--------------------------------------------------------------------------------
Common Stock       Michael Offerman             923,784               40%
$.01 Par Value     140 58th Street
                   Brooklyn, NY 11220(1)
--------------------------------------------------------------------------------
                   Murray Sennet                 24,500              1.1%
                   1900 Manor Lane
                   Plano, TX 75093
--------------------------------------------------------------------------------
                   Allen Gottlieb                     0                0
                   325 Coral Way
                   Ft. Lauderdale, FL 33301
--------------------------------------------------------------------------------
                   Robert Knoth                     400                *
                   140 58th Street
                   Brooklyn, NY  11220
--------------------------------------------------------------------------------
All Officers & Directors as a Group
(4 in number)                                   948,684               41%
--------------------------------------------------------------------------------
----------------------
         * Less than 1%.

1.       43,600 shares of common stock are jointly owned by Mr. Offerman and his
         wife, Gail Offerman.

All shares set forth above are owned directly by the named individual unless
otherwise stated.


Item 12.   Certain Relationships and Related Transactions

         Other than the employment terms for its executive officers as described
elsewhere in this Form 10-KSB, and as described below, there have been no
related transactions between the Company, officers, directors or shareholders
holding in excess of 5% of its securities within the last three years.


                                      -22-
<page>

                                 IEH CORPORATION

                                    PART III

Item 12.   Certain Relationships and Related Transactions (continued)

         During the year ended March 26, 2004, two of the Company's officers,
         (Michael Offerman, the Chief Executive Officer and Robert Knoth, the
         Chief Financial Officer, Controller and the Principal Accounting
         Officer) loaned the Company a total of $52,000 on a non-interest
         bearing basis. The Company used these funds as a source of additional
         working capital.

         During the year ended March 25, 2005, Mr. Robert Knoth loaned the
         Company an additional $135,744 on a non-interest bearing basis as well.
         These funds were used by the Company for working capital requirements.
         Through the period ended March 31, 2006, the Company had repaid
         $108,744 of the total funds loaned to it.

         During the year ended March 30, 2007 one of the officers loaned the
         company an additional $88,000 on a non-interest bearing basis. During
         the same period the company had repaid $76,000 of the loans made to it.
         The balance due to one of these officers at March 30, 2007 was $91,000.

Item 13.   Exhibits

         Exhibits filed with Form 10-KBS:

         31.1 Certification of Principal Executive Officer pursuant to Section17
         CFR 240.13a-14(a) or 17 CFR 240.15d-14(a).

         31.2 Certification of Principal Accounting Officer pursuant to
         Section17 CFR 240.13a-14(a) or 17 CFR 240.15d-14(a).

         32.1 Certification by Michael Offerman, President, pursuant to 17 CFR
         240.13a-14(b) or 17 CFR 240.15d-14(b) and Section 1350 of Chapter 63 of
         Title 18 of the United States Code.

         32.2 Certification by Robert Knoth, Chief Financial Officer, Controller
         and Principal Accounting Officer, pursuant to 17 CFR 240.13a-14(b) or
         17 CFR 240.15d-14(b) and Section 1350 of Chapter 63 of Title 18 of the
         United States Code.

Item 14.   Principal Accountant Fees and Services

         The Board of Directors of IEH has selected Jerome Rosenberg, CPA P.C.
         as the independent auditor of IEH for the fiscal year ending March 30,
         2007. Shareholders are not asked to approve such selection because such
         approval is not required. The audit services provided by Jerome
         Rosenberg, CPA P.C. consist of examination of financial statements,
         services relative to filings with the Securities and Exchange
         Commission, and consultation in regard to various accounting matters. A
         member of the firm is expected to be present at the next meeting of
         shareholders, will have the opportunity to make a statement if he so
         desires, and will be available to respond to appropriate questions.

         Audit Fees. During the fiscal year ended March 30, 2007 and March 31,
         2006, IEH paid an aggregate of $30,000 and $30,000, respectively, to
         Jerome Rosenberg, CPA P.C. for fees related to the audit of its
         financial statements.

                                      -23-
<page>

                                 IEH CORPORATION

                                    PART III

Item 14.   Principal Accountant Fees and Services (Continued)

         Audit Related Fees. During the fiscal years ended March 30, 2007 and
         March 31, 2006, no fees were paid to Jerome Rosenberg, CPA P.C. with
         respect to financial systems design or implementation.

         Tax Fees. During the fiscal years ended March 30, 2007 and March 31,
         2006, the Company paid to Jerome Rosenberg CPA P.C. the sums of $3,000
         and $3,000 for tax compliance, tax advice and tax planning services.

         All Other Fees. During the fiscal year ended March 30, 2007, IEH did
         not pay any other fees for services to its auditor.

                  The Board of Directors has determined that the services
         provided by Jerome Rosenberg, CPA P.C. and the fees paid to it for such
         services during the fiscal year ended March 30, 2007 has not
         compromised the independence of Jerome Rosenberg, CPA P.C.

                  The Board of Directors of the Company is comprised of three
         persons. Due to the limited size and scope of the Company's operations
         which are limited to one office and the level of revenue and income,
         the Board of Directors has not established an Audit Committee. Further,
         as the Company's securities are not traded on any exchange or on
         Nasdaq, but solely are listed for quotations on the Over the Counter
         Bulletin Board, there is no requirement that an Audit Committee be
         established. The Board, as an entirety, approves that appointment of
         its independent auditor and the related work performed by the auditor
         for services which are not audit related. In its deliberations
         regarding approval of the independent auditor for auditing and other
         services, the Board reviews the auditor's history of representing the
         Company, the fees to be paid and paid historically, the level of
         performance provided by the auditor and the ability of the Company,
         given its lack of profits to obtain similar services for similar costs.

                  Consistent with SEC policies regarding auditor independence,
         the Board of Directors has responsibility for appointing, setting
         compensation and overseeing the work of the independent auditor. In
         recognition of this responsibility, the Board has established a policy
         to pre-approve all audit and permissible non-audit services provided by
         the independent auditor. Prior to engagement of the independent auditor
         for the next year's audit, management advises the Board of the audit
         and permissible non-audit services expected to be rendered during that
         year for each of the categories of services which may provided by the
         independent auditor to the Board for approval. The primary categories
         of services expected to be provided by the independent auditor are as
         described in the fee table set forth above. In addition, management
         will also provide to the Board for its approval a fee proposal for the
         services proposed to be rendered by the independent auditor. Prior to
         the engagement of the independent auditor, the Board will approve both
         the description of audit and permissible non-audit services proposed to
         be rendered by the independent auditor and the budget for all such
         services. The fees are budgeted and the Board requires the independent
         auditor and management to report actual fees versus the budget
         periodically throughout the year by category of service.

                  During the year, circumstances may arise when it may become
         necessary to engage the independent auditor for additional services not
         contemplated in the original pre-approval. In those instances, the
         Board requires separate pre-approval before engaging the independent
         auditor.

                                      -24-
<page>

                                 IEH Corporation

                                    Contents

                        March 30, 2007 and March 31, 2006




                                                                          Page

                                                                         Number
                                                                         ------

Report of Independent Registered Public Accounting Firm                    26

Financial Statements:

         Balance Sheets as of March 30, 2007 and March 31, 2006            27

         Statement of Operations for the twelve months ended
            March 30, 2007 and March 31, 2006                              29

         Statement of Stockholders' Equity as of March 30, 2007
            and March 31, 2006                                             30

         Statement of Cash Flows for the years ended March 30, 2007
            and March 31, 2006                                             31

Notes to Financial Statements                                              33


                                      -25-
<page>


             Report of Independent Registered Public Accounting Firm
             -------------------------------------------------------


Board of Directors
IEH Corporation

We have audited the accompanying balance sheets of IEH Corporation as of March
30, 2007 and March 31, 2006 and the related statements of operations,
stockholders' equity, and cash flows for each of the two years in the periods
ended March 30, 2007 and March 31, 2006. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based upon our audit.

We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of IEH Corporation as of March 30,
2007 and March 31, 2006 and the results of its operations and its cash flows for
each of the two years ended March 30, 2007 and March 31, 2006 in conformity with
U.S. generally accepted accounting principles.


                                                    Jerome Rosenberg, CPA, P.C.
                                                         Melville, New York
                                                           June 18, 2007

                                      -26-
<page>

                                 IEH CORPORATION

                                 BALANCE SHEETS

                     As of March 30, 2007 and March 31, 2006

<table>
<caption>
                                                                    March 30,    March 31,
                                                                      2007         2006
                                                                   ----------   ----------

                                                                <c>          <c>

                                     ASSETS

CURRENT ASSETS:
  Cash                                                             $   34,908   $    8,742
  Accounts receivable, less allowances for doubtful accounts
     of $11,562 at March 30, 2007 and March 31, 2006                  981,571      900,347
  Inventories (Note 2)                                              1,573,632    1,540,423
  Prepaid expenses and other current assets (Note 3)                   11,380       25,992
                                                                   ----------   ----------

          Total current assets                                      2,601,491    2,475,504
                                                                   ----------   ----------


PROPERTY, PLANT AND EQUIPMENT, less accumulated depreciation and
   amortization of $6,558,278 at March 30, 2007
   and $6,373,522 at March 31, 2006 (Note 4)                        1,192,256    1,200,143
                                                                   ----------   ----------
                                                                    1,192,256    1,200,143
                                                                   ----------   ----------

OTHER ASSETS:
  Other assets                                                         25,098       23,177
                                                                   ----------   ----------
                                                                       25,098       23,177
                                                                   ----------   ----------

        Total assets                                               $3,818,845   $3,698,824
                                                                   ==========   ==========
</table>


The accompanying notes and independent auditors' report should be read in
conjunction with the financial statements.

                                      -27-
<page>

                                 IEH CORPORATION

                                 BALANCE SHEETS

                     As of March 30, 2007 and March 31, 2006

<table>
<caption>
                                                                       March 30,      March 31,
                                                                         2007           2006
                                                                      -----------    -----------

                                                                         <c>           <c>

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
    Accounts receivable financing (Note 5)                            $   477,387    $   269,099
    Notes payable, equipment, current portion (Note 7)                      3,136          3,358
    Loans payable-officers (Note 8)                                        91,000         79,000
    Accrued corporate income taxes                                          5,800         33,697
    Accounts payable                                                      588,804        775,870
    Pension plan payable, current portion (Note 10)                        20,000         43,000
    Other current liabilities (Note 6)                                    148,175        188,036
                                                                      -----------    -----------

          Total current liabilities                                     1,334,302      1,392,060
                                                                      -----------    -----------

LONG-TERM LIABILITIES:
    Pension Plan payable, less current portion (Note 10)                       --         20,000
    Notes payable, equipment, less current portion (Note 7)                   523          3,437
                                                                      -----------    -----------
          Total long-term liabilities                                         523         23,437
                                                                      -----------    -----------

          Total liabilities                                             1,334,825      1,415,497
                                                                      -----------    -----------

STOCKHOLDERS' EQUITY:
    Common stock, $.01 par value; 10,000,000 shares authorized;
      2,303,468 shares issued and outstanding at March 30, 2007 and
      March 31, 2006                                                       23,035         23,035
    Capital in excess of par value                                      2,744,573      2,744,573
    Retained earnings (Deficit)                                          (283,588)      (484,281)
                                                                      -----------    -----------

          Total stockholders' equity                                    2,484,020      2,283,327
                                                                      -----------    -----------

          Total liabilities and stockholders' equity                  $ 3,818,845    $ 3,698,824
                                                                      ===========    ===========

</table>

The accompanying notes and independent auditors' report should be read in
conjunction with the financial statements.

                                      -28-
<page>

                                 IEH CORPORATION

                             STATEMENT OF OPERATIONS

              For the Years Ended March 30, 2007 and March 31, 2006

                                                             Years Ended
                                                      -------------------------
                                                       March 30,      March 31,
                                                         2007          2006
                                                      -----------   -----------

REVENUE, net sales (Note 15)                          $ 6,255,606   $ 7,588,253
                                                      -----------   -----------

COSTS AND EXPENSES:
  Cost of products sold                                 4,619,126     4,856,281
  Selling, general and administrative                   1,138,668     1,253,458
  Interest expense                                         73,506        90,616
  Depreciation and amortization                           184,757       204,253
                                                      -----------   -----------
                                                        6,016,057     6,404,608
                                                      -----------   -----------


OPERATING INCOME                                          239,549     1,183,645

OTHER INCOME                                                1,144         1,171
                                                      -----------   -----------

INCOME BEFORE INCOME TAXES                                240,693     1,184,816

PROVISION FOR INCOME TAXES                                (40,000)      (47,194)
                                                      -----------   -----------

NET INCOME                                            $   200,693   $ 1,137,622
                                                      ===========   ===========

BASIC AND DILUTED EARNINGS PER COMMON SHARE (Note 1)  $       .09   $       .49
                                                      ===========   ===========

WEIGHTED AVERAGE NUMBER OF COMMON SHARES
  OUTSTANDING (IN THOUSANDS)                                2,303         2,303
                                                      ===========   ===========

The accompanying notes and independent auditors' report should be read in
conjunction with the financial statements.

                                      -29-
<page>

                                 IEH CORPORATION

                        STATEMENT OF STOCKHOLDERS' EQUITY

              For the Years Ended March 30, 2007 and March 31, 2006

<table>
<caption>

                                                        Capital in                   Retained
                                                        Excess of                    Earnings
                                 Common Stock           Par Value     (Deficit)        Total
                           -------------------------   -----------   -----------    -----------
                             Shares        Amount
                           -----------   -----------


                           <c>         <c>           <c>           <c>            <c>
Balances, March 25, 2005     2,303,468   $    23,035   $ 2,744,573   $(1,621,903)   $ 1,145,705

Net income: year ended
  March 31, 2006                    --            --            --     1,137,622      1,137,622
                           -----------   -----------   -----------   -----------    -----------

Balances, March 31, 2006     2,303,468   $    23,035   $ 2,744,573   $  (484,281)   $ 2,283,327

Net income: year ended
  March 30, 2007                    --            --            --       200,693        200,693
                           -----------   -----------   -----------   -----------    -----------

Balances, March 30, 2007     2,303,468   $    23,035   $ 2,744,573   $  (283,588)   $ 2,484,020

</table>


The accompanying notes and independent auditors' report should be read in
conjunction with the financial statements.

                                      -30-
<page>

                                 IEH CORPORATION

                             STATEMENT OF CASH FLOWS
                           Increase (Decrease) in Cash

              For the Years Ended March 30, 2007 and March 31, 2006

<table>
<caption>

                                                                              Years Ended
                                                                       --------------------------
                                                                         March 30,     March 31,
                                                                           2007          2006
                                                                       -----------    -----------

                                                                         <c>           <c>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income                                                           $   200,693    $ 1,137,622
                                                                       -----------    -----------

  Adjustments to reconcile net income to net cash provided (used) by
    operating activities

  Depreciation and amortization                                            184,757        204,253

Changes in assets and liabilities:
  (Increase) decrease in accounts receivable                               (81,224)      (130,945)
  (Increase) decrease inventories                                          (33,209)      (321,320)
  (Increase) decrease in prepaid expenses and other current assets          14,612        (11,780)
  (Increase) decrease in other assets                                       (1,921)        18,385

  (Decrease) increase in accounts payable                                 (187,067)      (106,776)
  (Decrease) increase in other current liabilities                         (39,861)        (6,078)
    Increase in accrued corporate income taxes                             (27,897)         5,410
  (Decrease) in pension plan payable                                       (43,000)       (86,000)
                                                                       -----------    -----------

               Total adjustments                                          (214,810)      (434,851)
                                                                       -----------    -----------

NET CASH PROVIDED BY (USED) FOR OPERATING ACTIVITIES                       (14,117)       702,771
                                                                       -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES:

   Acquisition of property, plant and equipment                           (176,869)      (231,963)
                                                                       -----------    -----------

          NET CASH USED BY INVESTING ACTIVITIES                        $  (176,869)   $  (231,963)
                                                                       -----------    -----------
</table>


The accompanying notes and independent auditors' report should be read in
conjunction with the financial statements.

                                      -31-
<page>

                                 IEH CORPORATION

                             STATEMENT OF CASH FLOWS
                           Increase (Decrease) in Cash

              For the Years Ended March 30, 2007 and March 31, 2006

                                                     March 30,    March 31,
                                                        2007         2006
                                                     ---------    ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on notes payable, equipment       $  (3,136)   $  (4,103)
Proceeds from accounts receivable financing            208,288     (374,373)
Proceeds (repayment) of loans payable - officers        12,000     (108,744)
                                                     ---------    ---------

NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES       217,152     (487,220)
                                                     ---------    ---------

INCREASE (DECREASE) IN CASH                             26,166      (16,412)

CASH, beginning of period                                8,742       25,154
                                                     ---------    ---------

CASH, end of period                                  $  34,908    $   8,742
                                                     =========    =========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION,
 Cash paid during the year for:

     Interest                                        $  64,614    $  84,309
                                                     =========    =========

     Income Taxes                                    $  35,613    $   6,796
                                                     =========    =========


The accompanying notes and independent auditors' report should be read in
conjunction with the financial statements.

                                      -32-
<page>

                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

Note 1 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

          Description of Business:

          The Company is engaged in the design, development, manufacture and
          distribution of high performance electronic printed circuit connectors
          and specialized interconnection devices. Electronic connectors and
          interconnection devices are used in providing electrical connections
          between electronic component assemblies. The Company develops and
          manufactures connectors, which are designed for a variety of high
          technology and high performance applications, and are primarily
          utilized by those users who require highly efficient and dense (the
          space between connection pins with the connector) electrical
          connections.

          The Company is continuously redesigning and adapting its connectors to
          meet and keep pace with developments in the electronics industry and
          has, for example, developed connectors for use with flex-circuits now
          being used in aerospace programs, computers, air-borne communications
          systems, testing systems and other areas. The Company also services
          its connectors to meet specified product requirements.

          Accounting Period:

          The Company maintains an accounting period based upon a 52-53 week
          year, which ends on the nearest Friday in business days to March 31st.
          The year ended March 30, 2007 was compromised of 52 weeks. The year
          ended March 31, 2006 was comprised of 53 weeks.

          Revenue Recognition:

          Revenues are recognized at the shipping date of the Company's
          products. The Company has historically adopted the shipping terms that
          title merchandise passes to the customer at the shipping point (FOB
          Shipping Point). At this juncture, title has passed, the Company has
          recognized the sale, inventory has been relieved, and the customer has
          been invoiced. The Company does not offer any discounts, credits or
          other sales incentives.

          The Company's policy with respect to customer returns and allowances
          as well as product warranty is as follows:

          The Company will accept a return of defective product within one year
          from shipment for repair or replacement at the Company's option. If
          the product is repairable, the Company at its own cost will repair and
          return to the customer. If unrepairable, the Company will either offer
          an allowance against payment or will reimburse the customer for the
          total cost of product.

          Most of the Company's products are custom ordered by customers for a
          specific use. The Company provides engineering services as part of the
          relationship with its customers in developing the custom product. The
          Company is not obligated to provide such engineering service to its
          customers. The Company does not charge separately for these services.

                                      -33-
<page>

                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

Note 1 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued):

          Inventories:

          Inventories are stated at cost, on a first-in, first-out basis, which
          does not exceed market value.

          The Company manufactures products pursuant to specific technical and
          contractual requirements. The Company historically purchases material
          in excess of its requirements to avail itself of favorable pricing as
          well as the possibility of receiving additional orders from customers.
          This excess may result in material not being used in subsequent
          periods, which may result in this material being deemed obsolete.

          The Company annually reviews its purchase and usage activity of its
          inventory of parts as well as work in process and finished goods to
          determine which items of inventory have become obsolete within the
          framework of current and anticipated orders. The Company based upon
          historical experience has determined that if a part has not been used
          and purchased or an item of finished goods has not been sold in three
          years, it is deemed to be obsolete. The Company estimates which
          materials may be obsolete and which products in work in process or
          finished goods may be sold at less than cost. A periodic adjustment,
          based upon historical experience is made to inventory in recognition
          of this impairment.

          Concentration of Credit Risk:

          The Company maintains cash balances at one bank. Amounts on deposit
          are insured by the Federal Deposit Insurance Corporation up to
          $100,000 in the aggregate. There were no uninsured balances at either
          March 30, 2007 or March 31, 2006.

          Property, Plant and Equipment:

          Property, plant and equipment is stated at cost less accumulated
          depreciation and amortization. The Company provides for depreciation
          and amortization using the Double Declining Balance method over the
          estimated useful lives (5-7 years) of the related assets.

          Maintenance and repair expenditures are charged to operations, and
          renewals and betterments are capitalized. Items of property, plant and
          equipment, which are sold, retired or otherwise disposed of, are
          removed from the asset and accumulated depreciation or amortization
          account. Any gain or loss thereon is either credited or charged to
          operations.

          Income Taxes:

          The Company follows the policy of treating investment tax credits as a
          reduction in the provision for federal income tax in the year in which
          the credit arises or may be utilized. Deferred income taxes arise from
          temporary differences resulting from different depreciation methods
          used for financial and income tax purposes. The Company has adopted
          Statement of Financial Accounting Standards (SFAS) No. 109,
          "Accounting for Income Taxes".

                                      -34-
<page>

                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

Note 1 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued):

          Net Income Per Share:

          The Company has adopted the provisions of SFAS No. 128, "Earnings Per
          Share", which requires the disclosure of "basic" and "diluted"
          earnings (loss) per share. Basic earnings per share is computed by
          dividing net income by the weighted average number of common shares
          outstanding during each period. Diluted earnings per share is similar
          to basic earnings per share except that the weighted average number of
          common shares outstanding is increased to reflect the dilutive effect
          of potential common shares, such as those issuable upon the exercise
          of stock or warrants, as if they had been issued. For the years ended
          March 30, 2007 and March 31, 2006, there were no items of potential
          dilution that would impact on the computation of diluted earnings or
          loss per share.

          Fair Value of Financial Instruments:

          The carrying value of the Company's financial instruments, consisting
          of accounts receivable, accounts payable, and borrowings, approximate
          their fair value due to the relatively short maturity (three months)
          of these instruments.

          Use of Estimates:

          The preparation of financial statements in conformity with generally
          accepted accounting principles requires management to make estimates
          and assumptions that affect the reported amounts of assets and
          liabilities, revenues and expenses, and disclosure of contingent
          assets and liabilities at the date of the financial statements. Actual
          amounts could differ from those estimates.

          Impairment of Long-Lived Assets:

          SFAS No. 144, "Accounting For The Impairment of Long-Lived Assets And
          Long-Lived Assets To Be Disposed Of", requires that long-lived assets
          and certain identifiable intangibles to be held and used by an entity
          be reviewed for impairment whenever events or changes in circumstances
          indicate that the carrying amount of an asset may not be recoverable.
          The Company has adopted SFAS No. 144. There were no long-lived asset
          impairments recognized by the Company for the years ended March 30,
          2007 and March 31, 2006.

          Reporting Comprehensive Income:

          The Company has adopted the provisions of SFAS No. 130, "Reporting
          Comprehensive Income". This Statement established standards for
          reporting and display of comprehensive income and its components
          (revenues, expenses, gains and losses) in an entity's financial
          statements. This Statement requires an entity to classify items of
          other comprehensive income by their nature in a financial statement
          and display the accumulated balance of other comprehensive income
          separately from retained earnings and additional paid-in capital in
          the equity section of a statement of financial position. There were no
          material items of comprehensive income to report for the years ended
          March 30, 2007 and March 31, 2006.

                                      -35-
<page>

                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

Note 1 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued):

          Segment Information:

          The Company has adopted the provisions of SFAS No. 131, "Disclosures
          About Segment of An Enterprise and Related Information." This
          Statement requires public enterprises to report financial and
          descriptive information about its reportable operating segments and
          establishes standards for related disclosures about product and
          services, geographic areas, and major customers. The adoption of SFAS
          No. 131 did not affect the Company's presentation of its results of
          operations or financial position.

          Research and Development:

          The Company provides personalized engineering services to its
          customers by designing connectors for specific customer applications.
          The employment of electromechanical engineers is the anticipated
          cornerstone of the Company's future growth. The Company maintains a
          testing laboratory where its engineers experiment with new connector
          designs based on changes in technology and in an attempt to create
          innovative, more efficient connector designs.

          The Company expended $10,000 and $21,000 for the years ended March 30,
          2007 and March 31, 2006, respectively, on Company sponsored research
          and development activities relating to the development of new designs,
          techniques and the improvement of existing designs. In addition, the
          Company received $10,000 in revenues for the year ended March 30, 2007
          and $21,000 for the year ended March 31, 2006, respectively, pursuant
          to customer sponsored research activities.

          Effect of New Accounting Pronouncements:

          The Company does not believe that any recently issued but not yet
          effective accounting standards, have a material effect on the
          Company's financial position, results of operations or cash flows.

                                      -36-
<page>

                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

Note 2 -  INVENTORIES:

          Inventories are stated at cost, on a first-in, first-out basis, which
          does not exceed market value.

          The Company manufactures products pursuant to specific technical and
          contractual requirements. The Company historically purchases material
          in excess of its requirements to avail itself of favorable pricing as
          well as the possibility of receiving additional orders from customers.
          This excess may result in material not being used in subsequent
          periods, which may result in this material being deemed obsolete.

          The Company annually reviews its purchase and usage activity of its
          inventory of parts as well as work in process and finished goods to
          determine which items of inventory have become obsolete within the
          framework of current and anticipated orders. The Company based upon
          historical experience has determined that if a part has not been used
          and purchased or an item of finished goods has not been sold in three
          years, it is deemed to be obsolete. The Company estimates which
          materials may be obsolete and which products in work in process or
          finished goods may be sold at less than cost. A periodic adjustment,
          based upon historical experience is made to inventory in recognition
          of this impairment.

          Inventories are comprised of the following:

                              March 30,    March 31,
                                2007         2006
                             ----------   ----------

          Raw materials      $  873,958   $  907,849
          Work in progress      368,675      130,480
          Finished goods        330,999      502,094
                             ----------   ----------

                             $1,573,632   $1,540,423
                             ==========   ==========

Note 3 -  PREPAID EXPENSES AND OTHER CURRENT ASSETS:

          Prepaid expenses and other current assets are comprised of the
          following:

                                     March 30,    March 31,
                                       2007         2006
                                    ----------   ----------

          Prepaid insurance         $    1,636   $   13,955
          Prepaid corporate taxes        9,744       11,905
          Other current assets              --          132
                                    ----------   ----------
                                    $   11,380   $   25,992
                                    ==========   ==========

                                      -37-
<page>

                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS


Note 4 -          PROPERTY, PLANT AND EQUIPMENT:

                  Property, plant and equipment are as follows:

                                           March 30,    March 31,
                                             2007         2006
                                          ----------   ----------

          Computers                       $  210,321   $  205,799
          Leasehold improvements             585,831      585,831
          Machinery and equipment          4,810,708    4,705,561
          Tools and dies                   1,980,189    1,912,989
          Furniture and fixture              155,935      155,935
          Website development cost             7,550        7,550
                                          ----------   ----------

                                           7,750,534    7,573,665
          Less: accumulated
          depreciation and amortization
                                           6,558,278    6,373,522
                                          ----------   ----------

                                          $1,192,256   $1,200,143
                                          ==========   ==========

Note 5 -  ACCOUNTS RECEIVABLE FINANCING:

          The Company entered into an accounts receivable financing agreement
          whereby it can borrow up to eighty percent of its eligible receivables
          (as defined in the agreement) at an interest rate of 2 1/2 % above JP
          Morgan Chase's publicly announced rate of 8.25% at March 30, 2007,
          with a minimum of 12% per annum. The agreement has an initial term of
          one year and will automatically renew for successive one-year terms,
          unless terminated by the Company or Lender upon receiving sixty days
          prior notice. The loan is secured by the Company's accounts receivable
          and inventories. The balance due under this agreement as of March 30,
          2007 was $477,387. The balance due as of March 31, 2006 was $269,099.


Note 6 -  OTHER CURRENT LIABILITIES:

          Other current liabilities are comprised of the following:

                                           March 30,    March 31,
                                             2007         2006
                                          ----------   ----------

          Payroll and vacation accruals   $  124,044   $  169,919
          Sales commissions                   21,381       15,367
          Other                                2,750        2,750
                                          ----------   ----------
                                          $  148,175   $  188,036
                                          ==========   ==========

                                      -38-
<page>

                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

Note 7 -  NOTES PAYABLE EQUIPMENT:

          The Company financed the acquisition of new equipment with notes
          payable. The notes are payable over a sixty month period. The balance
          remaining at March 30, 2007 amounted to $3,659. The interest rate on
          the remaining lease is 22%.

          Aggregate future principal payments are as follows:

           Fiscal Year Ending March:
          2008                              $3,136
          2009                                 523
                                            ------
                                            $3,659
                                            ======

Note 8 -  RELATED PARTIES TRANSACTIONS

          During the year ended March 26, 2004, two of the Company's officers
          loaned the Company a total of $52,000 on a non-interest bearing basis.
          The Company used these funds as a source of additional working
          capital.

          During the year ended March 25, 2005, one of these officers loaned the
          Company an additional $135,744 on a non-interest bearing basis as
          well. These funds were also used by the Company for working capital
          requirements. Through the period ended March 31, 2006, the Company had
          repaid $108,744 of the total funds loaned to it.

          During the year ended March 30, 2007, one of the officers loaned the
          Company an additional $88,000 on a non-interest bearing basis. During
          the same period the Company repaid $76,000 of the loans made to it.

          The balance owed to one of these officers at March 30, 2007 was
          $91,000.

Note 9 -  INCOME TAXES:

          Income taxes are provided for the tax effects of transactions reported
          in the financial statements, and consist of taxes currently due as
          well as deferred taxes related to differences between financial
          statement and tax basis of assets and liabilities for financial
          statement and income tax reporting purposes. Deferred tax assets and
          liabilities represent the future tax consequences of these temporary
          differences, which will either be taxable or deductible in the year in
          which the assets or liabilities are recovered or settled. Accordingly,
          measurement of the deferred tax assets and liabilities attributable to
          the book-tax basis differentials are computed at a rate of 34% for
          federal and l2% for state and local tax purposes.

                                      -39-
<page>

                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

Note 9 -  INCOME TAXES (continued):

          The components of the deferred tax assets and liabilities are as
          follows:

                                              March 30,      March 31,
                                                2007           2006
                                             -----------    -----------
          Deferred tax assets:

          Net operating loss carryforwards   $   802,684    $ 1,765,056
                                             -----------    -----------

          Gross deferred assets tax assets       802,684      1,765,056

          Deferred tax liabilities:

          State income taxes                     (32,750)       (51,600)
                                             -----------    -----------

          Net deferred tax assets before
           valuation allowance                   769,934      1,713,456

          Valuation allowance                   (769,934)    (1,713,456)
                                             -----------    -----------

          Net deferred tax assets            $         0    $         0
                                             ===========    ===========

          At March 31, 2000, the Company established a 100% valuation allowance
          for the net deferred tax assets, as management could not determine
          that it was more likely than not that the deferred tax assets could be
          realized. The change in valuation allowance amounted to $943,522 for
          the year ended March 30, 2007.

          As of March 30, 2007, the Company has available Federal net operating
          loss carryforwards (NOL's) totaling approximately $802,684 which
          expire at various times through March 31, 2012; for State and Local
          purposes, the Company has available NOL's approximating $1,035,462,
          which expire at various times through March 31, 2012.

          Utilization of the NOL's may be limited pursuant to Internal Revenue
          Code Section 382 should significant changes to the existing ownership
          of the Company occur.

          A reconciliation of income taxes computed at the Federal statutory
          rate as compared to income tax expense at the effective income tax is
          as follows:

                                                          March 30,    March 31,
                                                            2007         2006
                                                          ---------    ---------

          Federal statutory income tax (benefit) rate       (34.0)%      (34.0)%

          State tax benefit, net of Federal liability       (21.0)%      (12.2)%

          Net change in valuation allowance                   55.0%        46.2%

          Effective income tax (benefit) rate                ( - )%       ( - )%

                                      -40-
<page>

                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

Note 10 - PENSION PLAN-SALARIED PERSONNEL:

          On June 30, 1995, the Company applied to the Pension Benefit Guaranty
          Corporation ("PBGC") to have the PBGC assume all of the Company's
          responsibilities and liabilities under its Salaried Pension Plan. On
          April 26, 1996, the PBGC determined that the Salaried Pension Plan did
          not have sufficient assets available to pay benefits, which were and
          are currently due under the terms of the Plan.

          The PBGC further determined that pursuant to the provisions of the
          Employment Retirement Income Security Act of 1974, as amended
          ("ERISA"), that the Plan must be terminated in order to protect the
          interests of the Plan's participants. Accordingly, the PBGC proceeded
          pursuant to ERISA to have the Plan terminated and the PBGC appointed
          as statutory trustee, and to have July 31, 1995 established as the
          Plan's termination date.

          The Company and the PBGC negotiated a settlement on the entire matter
          and on July 2, 2001, an agreement was reached whereby the Company's
          liability to the PBGC was reduced to $244,000. The Company will make
          monthly payments to the PBGC as follows:

               September 1, 2003 to August 1, 2004       $2,000 per month
               September 1, 2004 to August 1, 2006       $3,000 per month
               September 1, 2006 to August 1, 2007       $4,000 per month


          Additionally, the Company has made balloon payments of $25,000 each on
          January 1, 2004, May 1, 2004, May 1, 2005 and January 1, 2006.

          The Company also granted the PBGC a lien on the Company's machinery
          and equipment.

          As a result of this agreement the amount due the PBGC was restated to
          $244,000. $43,000 was paid during the year ended March 30, 2007,
          $86,000 was paid during the year ended March 31, 2006, $56,000 was
          paid during the year ended March 25, 2005 and $39,000 was paid during
          the year ended March 26, 2004. The remaining balance of $20,000 is
          reported as a current liability on the accompanying financial
          statements.

Note 11 - CHANGES IN STOCKHOLDERS' EQUITY:

          The accumulated deficit decreased by $200,693, which represents the
          net income for the fiscal year ended March 30, 2007.

                                      -41-
<page>

                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

Note 12-  2001 EMPLOYEE STOCK OPTION PLAN:

          On September 21, 2001 the Company's shareholders approved the adoption
          of the Company's 2002 Employees Stock Option Plan ("2002 Plan") to
          provide for the grant of options to purchase up to 750,000 shares of
          the Company's common stock to all employees, including senior
          management.

          Options granted to employees under this plan may be designated as
          options which qualify for incentive stock option treatment under
          Section 422A of the Internal Revenue Code, or options which do not so
          qualify.

          Under this 2002 Plan, the exercise price of an option designated as an
          Incentive Stock Option shall not be less than the fair market value of
          the Company's common stock on the day the option is granted. In the
          event an option designated as an incentive stock option is granted to
          a ten percent (10%) shareholder, such exercise price shall be at least
          110 Percent (110%) of the fair market value or the Company's common
          stock and the option must not be exercisable after the expiration of
          five years from the day of the grant.

          Exercise prices of non-incentive stock options may be less than the
          fair market value of the Company's common stock.

          The aggregate fair market value of shares subject to options granted
          to a participant(s), which are designated as incentive stock options,
          and which become exercisable in any calendar year, shall not exceed
          $100,000. As of March 30, 2007 no options had been granted under the
          2002 Plan.

Note 13 - CASH BONUS PLAN:

          In 1987, the Company adopted a cash bonus plan ("Cash Bonus Plan") for
          Executive Officers. Contributions to the Cash Bonus Plan are made by
          the Company only after pre-tax operating profits exceed $150,000 for a
          fiscal year, and then to the extent of 10% of the excess of the
          greater of $150,000 or 25% of pre-tax operating profits. For the year
          ended March 30, 2007 the contribution was $20,000. For the year ended
          March 31, 2006 the contribution was $75,500.

                                      -42-
<page>

                                 IEH CORPORATION

                          NOTES TO FINANCIAL STATEMENTS

Note 14 - COMMITMENTS:

          The Company exercised its option to renew its lease on its facility
          for 10 years. The original lease was in effect through August 23,
          2001.

          The Company is obligated under this lease renewal through August 23,
          2011, at minimum annual rentals as follows:

          Fiscal year ending March:

          2008                       $    168,384
          2009                            168,384
          2010                            168,384
          2011                            112,256
                                     ------------
                                     $    617,408
                                     ============

          The rental expense for the years ended March 30, 2007 and March 31,
          2006 was $142,369 and $136,325, respectively.

          The Company has a collective bargaining multi-employer pension plan
          ("Multi-Employer Plan") with the United Auto Workers of America,
          Local 259. Contributions are made in accordance with a negotiated
          labor contract and are based on the number of covered employees
          employed per month. With the passage of the Multi-Employer Pension
          Plan Amendments Act of 1990 (the "Act"), the Company may become
          subject to liabilities in excess of contributions made under the
          collective bargaining agreement. Generally, these liabilities are
          contingent upon the termination, withdrawal, or partial withdrawal
          from the Multi-Employer Plan.

          The Company has not taken any action to terminate, withdraw or
          partially withdraw from the Multi-Employer Plan nor does it intend to
          do so in the future. Under the Act, liabilities would be based upon
          the Company's proportional share of such Plan's unfunded vested
          benefits, which is currently not available. The amount of accumulated
          benefits and net assets of such Plan also is not currently available
          to the Company. The total contributions charged to operations under
          Multi-Employer Plan were $69,122 for the year ended March 30, 2007 and
          $62,771 for the year ended March 31, 2006.

Note 15 - REVENUES FROM MAJOR CUSTOMERS:

          In the fiscal years ended March 30, 2007 two customers accounted for
          approximately 23% of revenues. During the year ended March 31, 2006
          approximately 19% of the Company's total revenues were earned from one
          customer. Total sales to these customers were approximately $1,428,000
          and $1,469,000, respectively. No other customer accounted for over 10%
          of the Company's sales. Accounts receivable as of March 30, 2007,
          included receivables from one customer, which amounted to 15% of the
          total accounts receivable.

                                      -43-
<page>

                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                         IEH CORPORATION

                                         By:     /s/ Michael Offerman
                                                ---------------------
                                                Michael Offerman
                                                President

Dated:   June 27, 2007

         Pursuant to the requirements of the Securities Exchange Act of 1934,
this Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.


/s/ Michael Offerman                                       June 27, 2007
--------------------------------------------
Michael Offerman, Chairman of the
 Board and President

/s/ Robert Knoth                                           June 27, 2007
--------------------------------------------
Robert Knoth, Secretary and
 Treasurer; Chief Financial Officer,
 Controller and Principal Accounting Officer

/s/ Murray Sennet                                          June 27, 2007
--------------------------------------------
Murray Sennet, Director


/s/ Alan Gottlieb                                          June 27, 2007
--------------------------------------------
Alan Gottlieb, Director



                                      -44-